Found this very interesting article and wonder if this could change the landscape of things……

Who owns coalbed methane?

Landowners staking claim in coalbed methane production

Monday August 18, 2008

The resource is there for the taking. A previously untapped pool at times contentious and, of late, an alternative to add to Albertaâ€™s energy powerhouse.

But who owns it? The people of Alberta through the auspices of the provincial government, or landowners who hold title to the very soil this pool rests on?

In the last year, a small group of rural landowners is gaining momentum and strength in an unprecedented bid to stake their claim to the provinceâ€™s burgeoning coalbed methane resource.

The United Landowners of Alberta have stepped forward alleging the provincial government who has title to all mines and minerals has no claim when it come to coalbed methane since the group contends the gas is biogenic in origin and must be treated no differently than wind or solar power.

In a nutshell, the Alberta government isnâ€™t the rightful owner. Landowners are.

ULA spokesman Don Bester said scientific evidence is building on the origins of Albertaâ€™s coal bed methane, a type of natural gas found in underground coal seams.

Bester said recent studies indicate much of the methane is renewable and is constantly created by bacteria in a biogenic process. Basically, the ULA contends as a â€œreal timeâ€ renewable resource, the governmentâ€™s claim on coalbed methane is moot.

The group has even re-dubbed coalbed methane as RBG or Renewable Biogenic Gas since they conclude the organisms that create the gas, anaerobic bacteria, can be â€œfed.â€

â€œAnaerobic bacteria can survive without oxygen and uses carbon dioxide or water as a catalyst to their production. The byproduct of their production is renewable biogenic gas.â€

Quite the claim since the government forwards the argument regardless of how a gas is created, itâ€™s a gas and, thus, belongs to all Albertans.

Thermogenic gas can be created two ways. One is when it is formed at deeper depths by thermal cracking of sedimentary organic matter into hydrocarbon liquids and gas (this gas is co-genetic with oil, and is called â€œprimaryâ€ thermogenic gas), and the second is thermal cracking of oil at high temperatures into gas â€œsecondaryâ€ thermogenic gas and pyrobitumen.

â€œLetâ€™s make one very clear point here,â€ said Alberta Energy spokesman Sean Beardow. â€œCoalbed methane is a natural gas and therefore it is owned by Albertans. How it is created, whether itâ€™s thermogenic or biogenic subsurface natural gas. Whichever takes hundreds of thousands of years to produce thus calling it s renewable resource like wind or solar is a bit of a misnomer.â€

And therein lies the rub.

If the ULAâ€™s â€œscientificâ€ claims are correct that biogenic gas can be created in real time then the provinceâ€™s own push to create carbon capture and storage could be the emergence of a truly renewable resource since the CO2 is needed to feed the anaerobic bacteria. Now if all that is true, then the legal issue comes into play as to who owns it.

Bester contends although the government can lay claim to all rights for mines and minerals, a gas created in real time could disrupt that claim arguing the Farmerâ€™s Advocate position â€œthat we landowners of title hold to the heaven and hell theory.â€

Thus, a court action like no other.

â€œWeâ€™ve done our homework. Done our research and even government research is now supporting our position, but the government has no comment,â€ said Bester.

Bester likened this revelation to a landowner who wishes to produce methane gas through a hog or dairy operation. Does it matter then if the gas, according to the ULAâ€™s position as a real time organic byproduct, is produced above ground or below?

The argument also transcends to whether or not a landownerâ€™s property can be accessed to tap said resource.

Companies are currently required to negotiate access agreements with landowners in order to tap a natural gas source. Even if the landowner doesnâ€™t agree, a company can still proceed to drill because the Crown owns the resource and provincial board determines how much compensation a landowner should receive.
What the ULA alleges flies in the face of convention since most industry players are likely to take the position that methane is a mineral.

A 2006 study completed by the Alberta Geological Survey and U of A alludes although most of Albertaâ€™s methane production has centred on the Alberta Horseshoe Canyon and is thermogenic gas that methane in the Ardley coal zone could have a biogenic source.

Therefore by very strict definition, as interpreted by the ULA, RBG cannot be a mineral.

The ULA will also be challenging the Energy Resources Conservation Boardâ€™s right to issue drilling licences to oil and gas companies who do not have the landownerâ€™s approval to develop RBG that is under the Landownerâ€™s subsurface ownership.

The Alberta Surface Rights Board will be included in the action as the ULA further states the Board has no right to grant Right of Entry Orders which is giving oil and gas companies the right to subsurface trespass and the right to directional drill under an adjacent Landownerâ€™s subsurface.

Bester said the Landownerâ€™s ownership of RBG will have far reaching implications in the future as many previously developed CBM projects will come into play as Petroleum and Natural Gas rights that the Industry has acquired through the Crown have potentially been obtained illegally.

Bester is encouraging all Landowners are encouraged to attend and join the organization in order to gain further information and assistance in their rightful claim of ownership of RBG. Information regarding upcoming meetings will be posted in the near future on the Alberta Surface Rights website albertasurfacerights.ca and numerous media outlets.

The first information meeting is to be held in Taber at the Heritage Inn Aug. 6.

Democratic and Republican voters of Las Animas County will head to the pools Tuesday to make their choices in the primary election, though there is only one position up for grabs.

Most of the available candidate positions within both parties were already decided during the caucuses and county meetings held by the parties earlier in the year. A caucus is a meeting of members of a political party, most commonly used to choose the party’s policy, actions or to nominate candidates for various offices.

So we went down to Trinidad today to attend the meetings between Assistant Secretary of the Army Eastin, Major General Graham, and the Las Animas County Commissioners, and another between Eastin, Graham, and the local public.

After that, we stopped in at Black jack’s Saloon for lunch.

Seeing as how Trinidad and Las Animas County are in the middle of the primest cow-growin’ country in Colorado, we opted for a couple of middle-sized steaks. Normally we don’t eat much beef, especially since it has gotten so expensive. In fact, we don’t know many people who can afford to eat beef, especially steak, on a regular basis. So we decided to splurge.

We were not disappointed. The steaks were outstanding. They were grilled to perfection. The waitstaff was on the ball and friendly. The ambience was top notch. The place was happily noisy with satisfied customers. Yep, we’d go back there in a New York minute.

Moved by recent comments about how we owe farmers and ranchers who put food on our tables, I decided to ask the waitress where Black Jack’s gets their beef. She didn’t know. So I asked a fellow back by the grill. I expected to hear they get their custom cuts from a local rancher, or a local packing plant. You know. Genuine grass-fed, free-range beef. Or perhaps hand-rubbed Black Angus steers, massaged daily with New Belgium ales by a bevy of vestal virgins and fed a select mash of corn and more of that New Belgium ale.

Nope.

Black Jack’s gets their beef from Sysco. Imagine our surprise when we found that Sysco gets most of its beef from Buckhead Beef, which is an east coast company. They get their Kobe beef from Snake River Farms up in Idaho. Well. Imagine our surprise to find that Las Animas County’s premier steakhouse uses beef that only by the most coincidental of events might actually come from Las Animas County.

The 4,000-acre North Fork Ranch, known for beautiful canyons and rock outcroppings, is bearing the brunt of the state’s insatiable thirst for energy.

Residents of this community 30 miles west of Trinidad complain that drinking-water wells have become contaminated by methane wells, and that streams have become filled with silt and dried up – leaving a barren moon-like landscape.

A number of ranches and lots are listed for sale by residents who came to this area to get away from the noise and to get closer to nature.

“I don’t feel safe drinking the water from my well,” said Gopa Ross, 57, who has lived on the ranch since 2004. “From my observation, the water quality is not consistent – it changes.”

Ross said his well was tested and the water found unfit for drinking two years ago after a drilling incident polluted it.

But suppositions and impressions, not hard facts, are the basis of these allegations, said Jay Still, executive vice president of Dallas-based Pioneer Natural Resources Co., which owns methane wells on the ranch.

“It is very easy to make a statement that streams are drying, erosion or stream siltification is happening, and then it becomes a statement of fact,” Still said. “But where’s the science that backs that up? ”

Prolific methane reserve

The North Fork Ranch sits about 4,500 feet high on top of the Raton Basin – among the most prolific coal-bed methane reserves in the Rockies.

The seams filled with natural gas often are saturated with water, with gas held in the coal by water pressure. Bringing gas to the surface often results in the pumping of water, in some cases, tainted water. Today, the basin has about 2,000 wells – accounting for half the state’s coal-bed methane wells.

Since drilling on the ranch began in 2005, residents say they have noticed changes in their water. Not just the quality but also the quantity.

“We are seeing the effects on our surface water, and I just worry that next it will be our groundwater,” said longtime resident Marcia Dasko. “Without water, nothing else counts. We can’t live without it.”

A preliminary study sponsored by the state oil and gas commission in November 2007 said drilling is depleting the streams in the area by 2,500 acre-feet per year.

But a competing study, paid for by the industry but conducted under the supervision of the Colorado School of Mines, found that the depletion rate is 30 acre-feet per year.

Another industry-sponsored study concluded that silt in the streams is lower now than 10 years ago, partly because energy companies build and maintain the roads better.

“If we have real data to work with, we are better off to solve problems,” Still said.

County powerless

Las Animas County officials say they have no authority over water – it’s a state matter.

“Clearly we are concerned,” said Bill Cordova, county administrator. “People should have adequate water supply, but we don’t have control to do anything about that.”

However, the county opposes the state oil and gas commission’s efforts to toughen rules on coal-bed methane water, leading many residents to believe the county is sympathetic with the industry.

Tracy Dahl, president of the North Fork Ranch Landowners Association, traveled to Denver on July 15 for a hearing on the proposed rules before the commission.

“I am speaking on behalf of the North Fork Ranch, where I live, as well as for the thousands of people living in rural Las Animas County whose concerns and problems have not been represented by their local elected officials,” Dahl testified. “I live in the heart of the Raton Basin, and have been living with coal-bed methane development for several years now.

“Despite industry assurances to the contrary, numerous problems exist, and unless there is meaningful reform, it is likely to get far worse.”

State commissioners will begin deliberating the proposed rules Aug. 12, and a final decision is expected later this month.

“We do have new rules addressing coal-bed methane drilling,” said Dave Neslin, the commission’s acting director.

A loud boom

Gopa Ross remembers the evening of July 18, 2006.

She heard a loud boom at about 9:30 p.m. – loud enough to get all the neighbors calling each other. Then another boom at about 11 p.m. woke her up.

The source was a drilling accident at a nearby rig belonging to Pioneer Natural Resources. The drill bit had gotten stuck, so crew members applied pressure to release it. Pioneer said it is not clear whether that mechanical event caused problems in water wells.

Ross said she noticed the next day that her well water had swelled almost to the top. And it reeked.

She called Pioneer, the state oil and gas commission and local officials. Samples taken from her well tested for high levels of metal, making it unfit to drink, she said.

Pioneer bought her bottled water, offered to put her up in a hotel and tried to negotiate a settlement.

Unlike her neighbors, the Doloras family, which had settled with Pioneer after its water well blew up, Ross held out. Pioneer said it offered to dig a water well for Ross, but that well turned out to be dry.

“We could not come to an understanding,” Ross said.

The state oil and gas commission initiated enforcement action against Pioneer, Neslin said. Currently, the commission is seeking to reach an appropriate penalty. If imposed, the penalty money would go to the state.

Ross said the incident changed her life.

Construction of her house stalled as company and government officials came in and out of her property to inspect the well. Her brother, who was helping with construction, died, and the house never got built.

She now lives in her barn.

Just as well, since she can’t board horses anymore. She said the three horses she had wouldn’t drink the well water.

“I know the drilling incident was not on purpose – it was just a problem,” Ross said. “But I am the one that has to deal with it. That one night destroyed my dream.”

Last week, Ross sued Pioneer and some contractors. She wants a jury to decide an appropriate compensation.

“We provided Ms. Ross with fresh water for over a year, we tried to negotiate a solution, offered to put purification equipment on her well and re-drill a water well at a better location,” Still said.

“Earlier this year, we quit supplying her fresh water when we saw the negotiations were going nowhere. If she wants to take us to court, we will be ready with our facts to stand in court.”

Residents did prepare

In early 2005, when it became clear that drilling was on the way, residents at North Fork Ranch began to prepare.

They paid for baseline studies, kept records and took photos to make sure they’d have evidence if things changed.

Sure enough, they said, things did change.

“This used to be pristine country,” said Gary East, 61, who has lived in the ranch for seven years. “Now I can see the scars on the hills from drilling. The construction is unbelievable – they are changing the slogan ‘Colorful Colorado.’ ”

Last month, East sold his property.

East’s two sons work in the energy industry. He said they understand his concerns and his decision to leave the ranch – he believes drilling will make things worse.

“I know this industry generates a lot of income, and I don’t want to see people lose their jobs,” East said. “But I’d like a little respect for what we own on the surface, a little more protection of our air, our water.”